Knightscope(KSCP) - 2024 Q1 - Quarterly Report

Financial Performance - Total revenue for Q1 2024 was $2,254,000, a decrease of 22$2,897,000 in Q1 2023[22] - Net loss for Q1 2024 was $7,592,000, compared to a net loss of$2,444,000 in Q1 2023, representing a 210% increase in losses year-over-year[22] - The gross loss for Q1 2024 was $1,445,000, compared to a gross loss of$213,000 in Q1 2023[22] - Total revenue for the three months ended March 31, 2024, was $2,254 million, compared to$2,897 million for the same period in 2023, reflecting a decline in both ASR and ECD revenues[74] - Service revenue remained relatively flat at $1.691 million, while product revenue decreased by approximately$0.6 million to $0.563 million due to structural changes in the ECD product line[132] - Total other income decreased by approximately$3.4 million, or 83%, to $0.688 million for the three months ended March 31, 2024, compared to$4.077 million in the same period of 2023[143] Cash Flow and Liquidity - Net cash used in operating activities was $8.611 million for Q1 2024, up from$6.483 million in Q1 2023, indicating worsening cash flow from operations[28] - Cash and cash equivalents increased to $2,487,000 as of March 31, 2024, up from$2,282,000 as of December 31, 2023[18] - Cash and cash equivalents at the end of the period were $2.587 million, an increase from$2.475 million at the end of Q1 2023[28] - The company reported a net cash provided by financing activities of $9.710 million in Q1 2024, compared to$4.915 million in Q1 2023[28] - The company is dependent on additional fundraising to sustain operations, indicating potential liquidity challenges in the next twelve months[36] Assets and Liabilities - Total current assets rose to $9,921,000 as of March 31, 2024, compared to$8,213,000 as of December 31, 2023, reflecting an increase of 20.8%[18] - Total liabilities increased to $16,616,000 as of March 31, 2024, up from$15,405,000 as of December 31, 2023, indicating a rise of 7.9%[18] - The company reported a total stockholders' deficit of $26,638,000 as of March 31, 2024, slightly increased from$26,634,000 as of December 31, 2023[18] - The total assets of the company increased to $23,993,000 as of March 31, 2024, compared to$22,974,000 as of December 31, 2023, marking a growth of 4.4%[18] - The accumulated deficit as of March 31, 2024, was approximately $169.1 million, with a stockholders' deficit of approximately$26.6 million[36] Research and Development - Research and development expenses for Q1 2024 were $1,569,000, an increase of 12.3$1,397,000 in Q1 2023[22] - Research and development expenses increased by approximately $0.172 million, or 12$1.569 million, representing 70% of total revenue[138] Stock and Equity - The number of weighted average shares used to compute basic and diluted net loss per share increased to 96,365,979 in Q1 2024 from 42,746,330 in Q1 2023[22] - The Company issued 13,512,738 shares of Class A Common Stock under its at-the-market offering program, generating net proceeds of approximately $7.1 million during the three months ended March 31, 2024[90] - The total preferred stock outstanding as of March 31, 2024, was 9,473,084 shares, with net proceeds from issuance amounting to$34,015 million[88] - The Company had a total of 25,154,887 shares of Class A Common Stock reserved for future issuance as of March 31, 2024[89] Operational Challenges and Future Outlook - The Company is focused on streamlining operations and reducing costs, particularly in its K1B product line, to achieve profitable growth[109] - The Company expects fluctuations in results of operations throughout 2024 due to its transition and cost-streamlining efforts[113] - The Company believes the demand for automated security solutions will grow due to rising crime rates and security breaches[123] - The Company is evaluating actions to improve production methods, cost, quality, and product features in response to potential competition[126] Other Financial Metrics - The total stock-based compensation expense recognized for the three months ended March 31, 2024, was $334 million, down from$446 million in the same period of 2023, indicating a decrease of about 25%[87] - The warranty liability decreased from $406 million at the beginning of the year to$341 million by March 31, 2024, with a provision of $41 million issued during the quarter[59] - The Company had unamortized stock-based compensation expense of$2.3 million as of March 31, 2024, which will be recognized over a weighted average remaining vesting term of 2.52 years[86]